Tag: Fees

September News

Posted on October 9, 2019

Vanguard Expands its Robo Offering

Vanguard is piloting and is expected to soon release a new digital planning and automated-investing product called Vanguard Digital Advisor, according to a document filed with the SEC. Vanguard Digital Advisor will have a $3,000 minimum and an all-in fee—management and underlying fund fees—of 0.20%, placing it in direct competition with providers targeting less affluent investors. In doing so, Vanguard will undercut incumbents Fidelity and JP Morgan, who both have all-in costs of 0.35% and independents Wealthfront and Betterment, who have all-in costs of around 0.33% and 0.36%, respectively, depending on the portfolio chosen. 

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Schwab Offers No-Commission Trading, Others Follow

Posted on October 4, 2019

Schwab Cuts Commissions, TD Ameritrade Follows

Decades ago, Schwab led the revolution of reducing commissions on trades. High-tech startups, led by Robinhood, are now eliminating commissions altogether. Interactive Brokers slashed commissions on U.S. stocks and ETFs to zero last week. Schwab has responded in kind by announcing that it will cut all commissions on trades of U.S. stocks, ETFs, and options on October 7. TD Ameritrade and ETrade have both followed suit and cut the same commissions. The move rattled the prices of these companies’ shares. Schwab’s and Interactive Brokers’ share prices both fell over 9%, and TD Ameritrade’s, which relies more heavily on commission revenue, fell 25.8%. ETrade, who has kept commissions steady, saw its share price drop 17% on the day of the Schwab announcement.

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Vanguard to Release Digital Advisor Service

Posted on September 24, 2019

Vanguard is piloting and is expected to soon release a new digital planning and automated-investing product called Vanguard Digital Advisor, according to a document filed with the SEC. Vanguard Digital Advisor will have a $3000 minimum and an all-in fee of 0.20%, placing it in direct competition with providers targeting less affluent investors. In doing so, Vanguard will undercut incumbents Fidelity and JP Morgan, who both have all-in costs—management and underlying fund fees— of 0.35% and independents Wealthfront and Betterment, who have all-in costs of around 0.33% and 0.36%, respectively depending on the portfolio chosen. 

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The Rise of Digital Advice

Posted on September 21, 2019

When digital investing was first introduced, platforms quickly began accumulating assets. Digital advisors were labeled industry disruptors, as talks of fee compression, the commoditization of professional asset management, and disruption of the investment advice industry ran rampant.  Digital advice providers had the advantage of emerging during a historic multi-year bull market. Over the last four years, the market has continued to mature, adoption has spread across major financial institutions, and new consumer trends have emerged. An increasing number of companies are battling for market share and institutions have developed their own offerings.  In the race to achieve scale, the largest independent advisors continue to expand product offerings to stay a step ahead of incumbent players and maintain impressive rates of asset accumulation.  

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Best Robo for First-Time Investors

Posted on September 13, 2019

Winner: Betterment
Runner-Up: SoFi

Betterment wins the award for Best Robo for First-Time Investors. With no investment minimum and a 0.25% annual fee, their digital-only product is a strong choice for first-time investors. Betterment’s single-goal financial planning tools make it easy for first-time investors to plan for future financial success. In addition, Betterment offers various financial planning packages that provide personal consultations with a financial planner on an as-needed basis, so users only have to pay for personalized professional help as they see fit. It is important to recognize that as a client’s assets grow, so do their financial planning and management needs. Betterment’s tiered service model is very attractive since an investor can always upgrade to the premium service levels as their needs grow, without having to change advisors. Betterment users can also open savings and checkings accounts with Betterment Everyday. Deposits in the savings account earn 2.39%  and are FDIC insured up to $1M. 

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The Robo Ranking™: Best Robo from an Incumbent Financial Institution

Posted on September 10, 2019

Winner: Fidelity Go

Runner-Up: Vanguard

Fidelity Go, followed by Vanguard, are the Best Robos from an Incumbent Financial Institution. While our analysis indicates that independent robo advice providers offer the most robust online platforms, Fidelity and Vanguard leverage their institutional might to offer a high-quality service based on proprietary funds for those who would rather entrust their money to larger, more established institutions.

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